Deck 18: Determination of Tax

Question 1

All of the following items are deductions for adjusted gross income except

A)interest on student loans.
B)unreimbursed employee business expenses.
C)qualifying contributions to individual retirement accounts.
D)one-half of self-employment taxes on year's earnings.

Answer 1

B

Question 2

The standard deduction may not be claimed by one married taxpayer filing a separate return if the other spouse itemizes deductions.

Answer 2

True

Question 3

Which of the following credits is considered a refundable credit?

A)credit for elderly and disabled
B)earned income credit
C)adoption expense credit
D)lifetime learning credit

Answer 3

B

Question 4

A sole proprietor is tentatively eligible for the 20% qualified business income deduction.The taxpayer will only be able to deduct the amount if she claims itemized deductions.

Question 5

All of the following items are deductions for adjusted gross income except

A)contributions to health savings accounts.
B)trade or business expenses.
C)rent and royalty expenses.
D)state and local income taxes.

Question 6

Generally,itemized deductions are personal expenses specifically allowed by the tax law.

Question 7

Taxable income for an individual is generally defined as

A)AGI reduced by itemized deductions and tax credits.
B)gross income reduced by itemized deductions.
C)AGI reduced by tax credits.
D)AGI reduced by the greater of the standard deduction or itemized deductions.

Question 8

All of the following items are generally excluded from income except

A)child support payments.
B)interest on corporate bonds.
C)interest on state and local government bonds.
D)life insurance proceeds paid by reason of death.

Question 9

Generally,deductions for (not from)adjusted gross income are personal expenses specifically allowed by tax law.

Question 10

Although exclusions are usually not reported on an individual's income tax return,interest income on state and local government bonds must be reported on the tax return.

Question 11

The standard deduction is the maximum amount of itemized deductions which may be claimed by a taxpayer and is based on an individual's filing status,age,and vision.

Question 12

Nonrefundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

Question 13

Nonresident aliens are allowed a full standard deduction.

Question 14

The term "gross income" means the total of all income from any source,but after reduction for exclusions.

Question 15

Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

Question 16

A qualifying child of the taxpayer must meet the gross income test.

Question 17

Taxpayers have the choice of claiming either deductions for AGI or the standard deduction.

Question 18

All of the following items are included in gross income except

A)pension benefits received.
B)rent income.
C)interest earned on a bank account.
D)child support payments received.

Question 19

A single taxpayer provided the following information for 2019: $$\begin{array} { | l | r | } \hline \text { Salary } & \$ 80,000 \\\hline \text { Interest on local government bonds } & 4,000 \\\text { (qualifies as a tax exclusion) } & \\\hline \text { Allowable itemized deductions } & 13,000 \\\hline\end{array}$$ What is taxable income?

A)$71,000
B)$67,800
C)$80,000
D)$67,000

Question 20

For purposes of the dependency exemption,a qualifying child must be under age 19,a full-time student under age 24,or a permanently and totally disabled child.

Question 21

On June 1,2019,Ellen turned 65.Ellen has been a widow for five years and has no dependents.Her standard deduction is

A)$25,700.
B)$24,400.
C)$13,850.
D)$12,200.

Question 22

One requirement for claiming a dependent as a qualifying relative is that the taxpayer provides more than 50 percent of the dependent's support (assuming it is not a multiple support agreement situation).

Question 23

Taquin,age 67 and single,paid home mortgage interest of $5,000,charitable contributions of $5,000 and property taxes of $4,000 in 2019.He has no dependents.Taquin will claim a deduction from AGI of

A)$13,850.
B)$15,650.
C)$15,500.
D)$14,000.

Question 24

Cheryl is claimed as a dependent by her parents.She had a part-time job during 2019 and earned $4,900 during the year,in addition to $600 of interest income.What is her standard deduction?

A)$1,100
B)$4,900
C)$5,250
D)$12,200

Question 25

Husband and wife,who live in a common law state,are eligible to file a joint return for 2019,but elect to file separately.Wife has adjusted gross income of $25,000 and has $2,200 of expenditures which qualify as itemized deductions.Husband deducts itemized deductions of $14,200.What is the taxable income for the wife?

A)$12,600
B)$22,800
C)$25,000
D)None of the above

Question 26

Charlie is claimed as a dependent by his parents in 2019.He received $8,000 during the year from a part-time acting job,which was his only income.What is his standard deduction?

A)$1,100
B)$12,200
C)$8,000
D)$8,350

Question 27

Parents must provide more than half the support of their child under the age of 19 in order for the child to be considered as a dependent qualifying child.

Question 28

In 2019,Brett and Lashana (both 50 years old)file a joint tax return claiming as a dependent their son who is blind.Their standard deduction is

A)$24,400.
B)$25,700.
C)$26,050.
D)$13,850.

Question 29

Generally,in the case of a divorced couple,the parent who has physical custody of a child for the greater part of the year is entitled to claim the child as a dependent.

Question 30

Lewis,who is single,is claimed as a dependent by his parents.He received $2,000 during the year in dividends,which was his only income.What is his standard deduction for 2019?

A)$1,100
B)$2,000
C)$2,350
D)$12,200

Question 31

A child credit is a partially refundable credit.

Question 32

A daughter or son may not satisfy the criteria to be considered a qualifying child but may still qualify as a dependent.

Question 33

Deborah is claimed as a dependent by her parents.She had a part-time acting job during 2019 and earned $13,000 during the year,which was her only income.What is her standard deduction?

A)$13,000
B)$1,100
C)$12,200
D)$13,350

Question 34

The person claiming a dependent under a multiple support declaration must provide more than 25% of the dependent's support.

Question 35

In 2019,the standard deduction for a married taxpayer filing a joint return and who is 67 years old with a spouse who is 65 years old is

A)$25,700.
B)$27,700.
C)$27,000.
D)$24,400.

Question 36

The regular standard deduction is available to which one of the following taxpayers?

A)a married taxpayer filing a separate return where the other spouse itemizes
B)a person who has only unearned income and is a dependent of another
C)a nonresident alien
D)None of the above.

Question 37

Annisa,who is 28 and single,has adjusted gross income of $55,000,itemized deductions of $5,000 and a lifetime learning credit of $1,000.In 2019,Annisa will have taxable income of

A)$42,800.
B)$49,000.
C)$50,000.
D)$41,800.

Question 38

When two or more people qualify to claim the same person as a dependent,a taxpayer who is entitled to claim the dependent through the qualified child rules has priority over a taxpayer who meets the requirements for other relatives.

Question 39

Ben,age 67,and Karla,age 58,have two children who live with them and for whom they provide total support.Their daughter is 21 years old,blind,is not a full-time student and has no income.Her twin brother is 21 years old,has good sight,is a full-time student and has income of $4,800.Which of the following statements is correct regarding Ben and Karla's ability to claim the twins as dependents?

A)The couple can claim both twins as dependents.
B)The couple cannot claim either twin as a dependent.
C)The couple can only claim the daughter as a dependent.
D)The couple can only claim the son as a dependent.

Question 40

For purposes of the dependency criteria,a qualifying child may not provide more than one-half of his or her own support during the year.

Question 41

Anna is supported entirely by her three sons John,James,and Joseph who provide for her support in the following percentages: John: 10%,James: 40%,Joseph: 50%
Assuming a multiple support declaration exists,which of the brothers may claim his mother as a dependent?

A)any of the sons
B)James or Joseph
C)Joseph only
D)none of them

Question 42

David's father is retired and receives $14,000 per year in Social Security benefits.David's father saves $4,000 of the benefits and spends the remaining $10,000 for his support.How much support must David provide for his father to meet the dependent support requirement?

A)$10,000
B)$10,001
C)$14,000
D)$14,001

Question 43

John supports Kevin,his cousin,who lived with him throughout 2019.John also supports three other individuals who do not live with him: Donna,who is John's mother
Melissa,who John's stepsister
Morris,who is John's cousin
Assume that Donna,Melissa,Morris,and Kevin each earn less than $4,200.How many dependents can John claim?

A)1
B)2
C)3
D)4

Question 44

Kelly is age 23 and a full-time student with interest and dividend income of $2,600 in the current year.The total cost of her support for the year is $19,000.She is not subject to the kiddie tax.

Question 45

The child credit is for taxpayers with dependent children under the age of

A)14.
B)17.
C)19.
D)24.

Question 46

An unmarried taxpayer may file as head of household if he maintains a home for his qualifying child.

Question 47

Julia provides more than 50 percent of the support for three individuals: Theresa,an unrelated child who lives with Julia all year long; Margaret,Julia's cousin,who lives in another city; and Emma,Julia's daughter,who lives in her own home.Each of the potential dependents earned less than $4,200.How many dependents can Julia claim?

A)0
B)1
C)2
D)3

Question 48

Ryan and Edith file a joint return showing $420,000 of AGI.They have three dependent children ages 7,9,and 13.What is the amount of their child credit?

A)$0
B)$2,000
C)$5,000
D)$6,000

Question 49

Nate and Nikki have two dependent children ages 12 and 15.Their modified AGI is $410,000.What is the amount of the child credit to which they are entitled?

A)$0
B)$500
C)$3,500
D)$4,000

Question 50

Anita,who is divorced,maintains a home in which she and her 16-year-old daughter live.Anita provides the majority of the support for her daughter and for a son,age 23,who is enrolled part-time at the university and lives in the dorm.The son also works in the campus bookstore and earns spending money of $4,500.Which of the following statements is correct regarding the number of dependents Anita can claim?

A)Anita can claim her daughter,but not her son,as a dependent.
B)Anita can claim her son,but not her daughter,as a dependent.
C)Both the son and daughter qualify as Anita's dependents.
D)Neither the daughter nor the son qualify as Anita's dependent.

Question 51

A married couple need not live together to file a joint return.

Question 52

Theo's wife moved overseas in April,and they have not been in touch,although they are still legally married.Theo pays all the costs of the household which includes his 12-year-old son.Because Theo is still married,his only option is to file his tax return as married filing separately.

Question 53

Blaine Greer lives alone.His support comes from the following sources: $$\begin{array} { |l | r | } \hline \text { Buddy (his son) } & \$ 2,600 \\\hline \text { Ken (his brother) } & 4,200 \\\hline \text { Martha (his daughter) } & 2,300 \\\hline \text { Natalie (a friend) } & 1,00 \\\hline \text { Total support } & \$ 10,100 \\\hline\end{array}$$ Assuming a multiple support declaration exists,which of the individuals may claim Blaine as a dependent?

A)Ken or Martha
B)Buddy,Ken,or Martha
C)Ken,Martha,or Natalie
D)none of them

Question 54

Which of the following is not considered support for the dependent support test?

A)food
B)clothing
C)rental value of lodging
D)value of services rendered by the taxpayer for the dependent

Question 55

Sarah,who is single,maintains a home in which she,her 15-year-old brother,and her 21-year-old niece live.Sarah provides the majority of the support for her brother,her niece,and her cousin,age 18,who is enrolled full-time at the university and lives in an apartment.While the niece and cousin have no income,her brother has a part-time job and earns $4,500 per year.How many dependents may Sarah claim?

A)1
B)2
C)3
D)None

Question 56

Amanda has two dependent children,ages 10 and 12.She earned $30,000 from her job,and her income tax before credits is $1,200.How much of her child credit is refundable?

A)$1,200
B)$1,400
C)$2,800
D)$4,000

Question 57

Steven and Susie Tyler have three children ages 13,15,and 19.The 19-year-old is in the military and not a dependent.Their modified AGI is $108,000.What is the amount of the child credit to which they are entitled?

A)$0
B)$2,000
C)$4,000
D)$6,000

Question 58

Juanita's mother lives with her.Juanita purchased clothing for her mother costing $1,000 and provided her with a room that Juanita estimates she could have rented for $4,000.Juanita spent $5,000 on groceries she shared with her mother.Juanita also paid $700 for her mother's health insurance coverage.How much of these costs is considered support?

A)$5,000
B)$8,200
C)$10,000
D)$10,700

Question 59

A widow or widower whose spouse passed away in the current year may file a joint tax return as long as the widow or widower does not remarry before the end of the year.

Question 60

Rose and Steve are a married couple with two qualifying children.Lily is a 15-year-old high school student,and Sam is a 21-year-old college student.The couple reports AGI of $165,000.The couple is entitled to child and dependent credits of

A)$2,000.
B)$4,000.
C)$1,000.
D)$2,500.

Question 61

Suri,age 8,is a dependent of her parents and has unearned income of $6,000.She must file her own tax return.

Question 62

When a spouse dies,the surviving spouse for the year of death

A)may file a married filing jointly return.
B)must file a tax return using the single filing status.
C)must file a tax return using the head of household filing status.
D)may file a married filing jointly return only if the death occurred in the last half of the year.

Question 63

The oldest age at which the "Kiddie Tax" could apply to a dependent child is

A)17.
B)18.
C)20.
D)23.

Question 64

To qualify as an abandoned spouse,the taxpayer is not required to

A)be a U.S.citizen or resident.
B)live apart from the spouse for the last six months of the year.
C)pay more than half the cost of maintaining the home.
D)have a son or daughter in the home for the entire year.

Question 65

Which filing status reaches the 37% marginal rate at the lowest level of taxable income?

A)surviving spouse
B)head of household
C)married filing separately
D)married filing jointly

Question 66

A married taxpayer may file as head of household under the abandoned spouse provisions if all of the following are met except

A)the taxpayer lived apart from his or her spouse for the last six months of the year.
B)the taxpayer is a U.S.citizen or resident.
C)the taxpayer pays over half of the cost of maintaining a household in which the taxpayer and a dependent son or daughter live for over half of the year.
D)the taxpayer must have been married for at least two years.

Question 67

In order to qualify to file as surviving spouse,all of the following criteria must be met by the widow or widower except

A)he or she and the decedent must have shared the same household as of date of death.
B)he or she must be a U.S.citizen or resident.
C)he or she must be qualified to file a joint return in the year of death.
D)he or she must have at least one dependent child living at home the entire year and pay over half of the expenses of the home.

Question 68

Tom and Alice were married on December 31 of last year.What is their filing status for last year?

A)They file as single.
B)They file as married filing jointly or married filing separately.
C)They file as single for half the year and married filing jointly for the other half.
D)They file as single for 364 days and married filing jointly for one day.

Question 69

Sally divorced her husband three years ago and has not remarried.Since the divorce she has maintained her home in which she and her now sixteen-year-old daughter reside.The daughter is a qualified child.Sally signed the daughter's dependent status over to her ex-spouse by filing the appropriate IRS form.What is Sally's filing status for the current year?

A)single
B)surviving spouse
C)head of household
D)married filing separately

Question 70

Divya is age 22 and a full-time student with $8,000 of income from part-time and summer jobs and $2,600 of interest and dividend income.The total cost of her support for the year is $15,000.Divya is not subject to the kiddie tax.

Question 71

In October 2019,Joy and Paul separated and have not lived with each other since,but they are still legally married.They do not file a joint return.Joy supports their children after the separation and pays the cost of maintaining their home.Joy's filing status in 2019 and 2020 is,respectively

A)single for both years.
B)head of household and single.
C)married filing separately for both years.
D)married filing separately and head of household.

Question 72

Michelle,age 20,is a full-time college student with earned income from wages of $5,200 and interest income of $700.Michelle's parents provide more than half of Michelle's support.Michelle's 2019 taxable income is

A)$0.
B)$700.
C)$350.
D)$4,850.

Question 73

You may choose married filing jointly as your filing status if you are married and both you and your spouse agree to file a joint return.Which of the following facts would prevent you from being considered married for filing purposes?

A)You were married for several years,but your divorce became final in December.
B)You are married but living apart until some problems can be solved.
C)Your spouse died during the year.
D)None of the above

Question 74

Elise,age 20,is a full-time college student with earned income from wages of $4,400 and interest income of $500.Elise's parents provide more than half of her support.Elise's 2019 taxable income is

A)$0.
B)$150.
C)$500.
D)$3,850.

Question 75

Edward,a widower whose wife died in 2016,maintains a household for himself and his 10-year-old daughter.Edward's most favorable filing status for 2019 is

A)single.
B)surviving spouse.
C)head of household.
D)married filing jointly.

Question 76

Which of the following dependent relatives does not have to live in the same household as the taxpayer who is claiming head of household filing status?

A)uncle
B)brother
C)father
D)nephew

Question 77

Tobe is a 22-year-old college student with $5,000 of interest income and $6,000 of earned income.Kiddie tax will apply to him if

A)he is a part-time student and the cost of his support exceeds $12,000.
B)he is a part-time student and the cost of his support is $12,000 or less.
C)he is a full-time student and the cost of his support exceeds $12,000.
D)he is a full-time student and the cost of his support is $12,000 or less.

Question 78

Dave,age 59 and divorced,is the sole support of his mother age 83,who is a resident of a local nursing home for the entire year.Dave's mother had no income for the year.Dave's filing status is

A)married filing separately.
B)single.
C)head of household.
D)married filing jointly.

Question 79

In 2016,Leo's wife died.Leo has two small children,ages 2 and 4,living at home whom he supports entirely.Leo does not remarry and is not claimed as a dependent on another's return during any of this period.In 2017,2018,and 2019,Leo's most advantageous filing status is,respectively

A)single for all three years.
B)head of household for all three years.
C)surviving spouse,surviving spouse,head of household.
D)surviving spouse,surviving spouse,single.

Question 80

If a 13-year-old has earned income of $500 and interest and dividends of $2,500,all of the income can be reported on the parent's return.